Look at the chart above. 85% of the wealth in the chart is owned by 20% of Americans. No matter how you feel about wealthy people, this statistic is a fact. On the other end of the spectrum 70% of people own less than 5% of the total wealth in this country. Where do we fall within this graph? You guessed right. 98% of African Americans fall within the bottom 3 tiers of this graph. Now this is established, you can toss these facts out the window because this graph doesn’t apply to a Master Builder. Once you agree to build then you can set the agenda of what happens in our neighborhoods.
Let’s begin with a definition of what wealth is: Wealth is asset accumulation and equity appreciation. Question: If we accumulate assets, can we become wealthy? Answer: Yes, you can, if those same assets appreciate in value each year. Simple right. Then, why do so many people have lack and poverty? There are many reasons, but if I had to guess, it would be they do not know how to accumulate appreciating assets. The second answer would be wealth is built over time and people are busy struggling for survival in their everyday lives.
All wealth begins with a seed. As a wealth builder your seed is capital. You go into the marketplace and plant or invest your seed capital by purchasing an asset. An asset can be real estate, a business, or a stock share in a company. At the end of the year the real estate returns rents, the business returns profits, and the stock returns dividends. If the rents, profits, and dividends are greater than last year’s returns, then the asset will be more valuable increasing your wealth. If the returns are less than a year ago, the asset will most likely go down in value.
Going back to building wealth. A wealth builder’s key skill is to be able to choose the right assets that give him the best chance of capital growth. Knowing where to place your capital is your most valuable skill. This takes practice, studying, and risk taking. Oh, that’s right, you put your money at risk every time you venture out. So, should you place your money under a mattress? No, just spend your time studying and doing your homework of where your money will work on your behalf the best with the least amount of risk of losing. This is a skill anyone can attain with practice and guidance. The best place to begin is by collecting seeds. Capital is where your wealth begins and ends every year.
